A Comprehensive Monetary Analysis of Inpatient Total Hip and Knee Arthroplasties Billed to Medicare by Hospitals: 2011-2017

Background: Total joint arthroplasty (TJA) has been a recent target of reimbursement reform. As such, the purpose of this study was to evaluate trends in Medicare reimbursement to hospitals for TJA patients from 2011 to 2017.

Methods: The Inpatient Utilization and Payment Public Use File was queried for all primary total hip and knee arthroplasty episodes. This file includes all services billed to Medicare via the Inpatient Prospective Payment System. Extracted data included hospital charges and amount paid by Medicare. All data were adjusted for inflation to 2017 US dollars. Multiple linear mixed-model regression analyses were conducted to assess change over time, and geo-modelling was used to represent reimbursement by location.

Results: A total of 3,368,924 primary TJA procedures were billed to Medicare by hospitals from 2011 to 2017 and included in the study. The mean inflation-adjusted Medicare payment to hospitals for DRG 469 decreased from $22,783.66 to $19,604.62 per procedure (-$3179.04; -14.0%; P < .001) and decreased from $13,290.79 to $11,771.54 for DRG 470 (-$1519.25; -11.4%, P = .011) from 2011 to 2017. Meanwhile, the mean charge submitted by hospitals increased by $6483.39 and $5115.60 for DRGs 469 and 470, respectively (+7.4% for 469, +9.3% for 470; P < .001). Medicare reimbursement to hospitals varied by state.

Conclusion: During the study period, the mean Medicare reimbursement to hospitals decreased for TJA from 2011 to 2017. Meanwhile, the average charge submitted by hospitals increased. As alternative payment models continue to undergo evaluation and development, these data are important for the advancement of more agreeable reimbursement models in arthroplasty care.